Travis Kalanick at Startup School 2012

wow this is awesome okay this place is full all right so good to meet all of you my name is Travis kalanick co-founder CEO of uber let's see so I do a lot of speaking because we are we're a technology company that is we're in the trenches we're in the cities you know more than half of our employees are not in San Francisco I almost I don't even remember the last time I spoke in San Francisco in front of an audience every time I go to speak somewhere right I look I go on Google and I look at the roads I look at architecture I look at cool pictures I can put that are iconic I'm going to speak in Silicon Valley and I'm searching Google Images and I can't find anything and so yeah there you go it's good to be here anyways I found a little something all right so guys I'm guessing most people here at least know what uber is but for those of you who don't I'm gonna go do a sort of a basic tour just really quick it's an app on your iPhone that helps you get a car our motto is everyone's private driver and so you you open up the app and you see a bunch of cars that are near you this is one of the San Francisco cars three minutes away and Jim will arrive in two minutes he's rated at four point eight and this is all of course all screenshots from your app when he arrives you're told you're notified you can call the driver of course and if you're lucky he'll open the door for you when you're done this is a short trip $15 that's our minimum in San Francisco of course we have lower-cost options now we have something called uber X a couple days ago we launched taxi in San Francisco for a lot of folks are like you're doing tax easier the anti taxi what are you doing we know what we're doing but we'll get to that in just a second all right so some basics launched in June 2010 so we're we're just over two years old we don't own cars we don't employ drivers a lot of people don't know that about us they think we we have all these assets they think that we employ lots of drivers we don't we have 120 employees most of which are not in San Francisco we don't have a marketing spend we're deployed in 17 cities for some reason there 16 here we actually just soft launched in Sydney a couple days ago actually yesterday Amsterdam is coming very very shortly and I think Minneapolis isn't on here we did that a couple weeks ago so quick numbers hundreds of thousands of hours driven per week a very interesting engagement figure 50% of all the people who have ever ridden on uber have ridden in the last 30 days and remember when you ride your pain so think about commerce think about a commerce site or a commerce app or 50% of the people who've ever paid paid in the last 30 days average person is paying about 105 dollars a month in San Francisco is a bit higher than that prices are probably a bit too high no some of you have felt that sting we're doing 26 percent month-over-month growth that's an average over the last now 16 17 months you go okay well if you start really low and you can grow really big but we were pretty big 12 months ago and if you do 26 percent month-over-month growth that means in 12 months you're 16 times bigger than you were 12 months ago so we're growing fast and in fact September over August was 29 percent month-over-month so I'm going to tell a little bit about our background and then hopefully if I have enough time get into some of the regulatory stuff which I know none of you guys want to hear about all right so this you can't see really well because of all the lights but it's a romantic shot from the Eiffel Tower between with me and my co-founder Garrett camps when you guys may know him who's the founder of StumbleUpon it was in Paris at LeWeb where we came up with this idea essentially you know he said look I just want to push a button and get a ride you know let's and let's make it a classy ride and that's kind of how we started Paris in many ways is a sister city of San Francisco impossible to get a cab there so this is something from the past this is what we call hailing I'm not sure if you guys have ever done that but some people actually put their arm out to get a cab I don't I don't know what's going on it's a weird thing but this is what we used to see in San Francisco I went through that when we first started actually it wasn't about taking over the world it wasn't about taking on corruption in every city around the world it was actually just about being baller in San Francisco and the only way to do it the original idea was let's go buy 10s classes let's hire 20 drivers and let's get a parking garage and I'm like Garrett we're not buying any car student and we're not signing any lease on a parking garage but the idea of pushing a button getting a ride in within minutes was a magical one and at the beginning it was lifestyle thing it was best classes for us and our hundred friends and so that's where it started in order to use the app you anybody could download it but in order to use it you had us have a special code that I gave you and pretty soon the inbox was just getting full of people who wanted the code because our friends were telling their friends and then you know I searched on Google Images is my favorite thing Xplosive viral growth on the internet and there you go that was the best one I could find we have this thing called God view this is an older version of God view you can see much more what's going on today but I can't show you the new version of God yet it's too intense but this is a screenshot of a Friday night very soon after we launched maybe a few weeks or something like that we had four trips going on at the same time we were going nuts like there's four trips there's like we got trips going on we got to dispatch the green line at the top there that's a dispatch he shouldn't have his arm up but he does but he's got it he's got a bill briefcase which is cool that's Friday night early on and now this is 5:00 a.m. on a Monday the eyeballs by the way you see some eyeballs every once in a while in there that's somebody opening an app so we see when people open apps that helps us in demand prediction remember we're logistics company or what I'd call it we were building an urban logistics fabric so when you do something successful not everybody's happy and the older the industry you're tackling the the more protected it is by government or by corruption or by both the more they're gonna be upset about what you do we're making drivers lives a hell of a lot better they're making a lot more money they're making ends meet they're living their American dream and uber is helping them do that riders are getting around town much more efficiently I'm not sure who hurts from this other than a particular incumbent industry which I will mention so a few metrics look when I'm having a bad day I just go to our overall revenue graph this is a cool trick in Photoshop if you take that image and you flip it it's like a smile okay all right that's just gratuitous okay look we launched in Sanford oh by the way so this this is what 26 percent month-over-month growth looks like and man a lot of times when I show this when I when I do presentations and cities we every time we launch in a city we do this big launch event sort of have some high rollers and people who really make the city move we sort of pay our respects to that city and and do a really nice dinner and and these folks are always leaning to the left looking for the axis when we first launched first of all a lot of people go wow it's successful that's so obvious I call it the the hand to the palm to forehead moment when they learn about uber they're like I had this idea or I should have had this idea when we first launched guys it wasn't easy getting our angel round people thought we were crazy limos in San Francisco what but it took off like I said and so one of the interesting things before we went to our series a or sorry this is actually before our series be here which we did in November of last year was is this a one-hit-wonder or not is this only gonna work in San Francisco because it's so screwed up and so we started launching in other cities and this is a Revenue chart on a weekly it's a weekly window or which you could think of it's like I'm almost a moving average blue is San Francisco yellow is New York this was early on the brown is Seattle and the green they're Chicago now obviously we're way past that now this was like sort of the first hundred days but what we found is that every city we were rolling out you know just hey we didn't know if it was going to work every city we were rolling out got progressively better our operations side of the house got very efficient and then the technology and the number of people who knew about us when we go in we went into New York we had a thousand people with credit cards on file without a car on the ground so this wasn't a one-hit wonder and so we just started launching a ton of cities and we have this double rainbow of metrics what does it mean remember as liquidity goes up this is you know people in the marketplace who are building a marketplace know what liquidity means it means demand and supply go up together if they don't you have a marketplace in our world as liquidity goes up the quality of the experience goes up and it dramatically right so our average pickup times in San Francisco are two minutes and 45 seconds when we first started in New York we're like 12 minute average pickup times and let me tell you you don't want to be delivering 12 minute pickup times to New Yorkers they will kick your ass so as it gets better now we're right around five minutes in New York and that's kind of when they lose their minds as more people use it you go from the core user base to bigger the engagement actually gets deeper the number of rides per Rider per month actually go up as we expand as a cool cohort graph but who cares right the bottom line is that 50% of the people who've ever used still use and we've seen that from the beginning this is an interesting one this is San Francisco indexed revenue so we're getting there's lots of town cars in San Francisco right the number of town cars that they were in San Francisco before we got there was 600 there are now more cars dedicated to uber then there were town cars in San Francisco when we got there and so you're like well this thing is gonna slow down this train is going to slow down at some point we indexed San Francisco revenue from last year July 1st through the end of the year and looked at this year July 1st to where we are now and it's tracking almost identical so it's not slowing down anytime soon and when you're talking about for a particular city 20 percent month-over-month it growth that's that's really big growth especially when you're when the the numbers are getting big so in the operations side I think a lot of us are techies you know I'm an engineer by training we know what product managers are we know what that means but when you're on the ground when your technology touches people and it touches cities what you have to do is have process managers process managers are similar product managers they manage the process that people do versus machines and the roadmap for product has to dovetail with the roadmap for process because anytime we change anything that happens in a car that's got to change the tech and vice versa so there's really interesting Road mapping processes that we go through come on this is supposed to be a picture of Europe we're rolling out very big in Europe right now so getting the operational expertise and I think this just isn't talked a lot about in startups is the operation side of the business I think a lot of e-commerce companies see that we see it on a very deep level because of you know the rubber is actually meeting the road but getting teams ready to roll out in Europe is something we've been spending time we're in Paris and London right now like I said we're gonna be an Amsterdam very soon and there's a whole host of other cities that were that are lined up in Europe and that's gonna be a big push end of this year all the way into the first half of next year we have somebody in Asia ready to go and Sydney's sort of our first city in Asia pack and I can't wait to go to the launch party okay all right so quality and choice it was really interesting right we we had this high-end thing it's cost about 50% more than a cab and everybody said oh we're this high-end and everybody goes wow I'm gonna do a low-cost uber there's like a few companies out there I can't remember their names that decide they're gonna be a low-cost uber and they clone our app you know they flatter us by basically stealing all the pixels and copying them over to their app uber fYI uber is gonna be the low-cost uber but it's about quality and choice and what we see when we lo when we roll out a low-cost option what we see is that actually engagement gets deeper because people have choice they don't have to always get the expensive thing so they start using it more often people who maybe wouldn't start with the black car products start with taxi or what we call uber X and then it's date night and they want to improve you know they want to impress their lady or they just need a comfortable ride and it goes from there so this was a little choice a beautiful thing let's keep moving taxi we did in Chicago in April we now have a few cities were in Boston Toronto Chicago San Francisco we were in New York over not anymore don't get me started fair enough we'll get to that at the end we did uber X which is sort of like a low-end uber where and we did this in July in San Francisco in New York and that's where it's basically 30% cheaper all hybrid fleet at least in SF where we're starting to diversify a little bit out of hybrids because we can't get the partners to buy cars fast enough but the thing is is you push a button and a car appears in five minutes and that feels magical but how you make that happen is actually very complex so we have a math department here there I like to tell them I say look guys you're in charge of our margins right because they need to get the pickup times really low but the utilization really high how do you do that right well you do that through a lot of math but let's start with our math department okay that's not my math department but we have two nuclear physicists on staff a computational neuroscientist a machine learning expert and a few other guys there they're killing it and some of the things they do they do demand prediction congestion prediction supply matching supply positioning smart dispatch algorithms dynamic pricing Friday and Saturday night are special nights we sometimes get really big waves of demand that you can't really get enough cars to do anything about so you have a marketplace oriented sort of dynamic pricing element that clears the market it gets more cars on the road and in sort of lassos in sort of uncontrollable demand you can't see these pictures really well because of the lights but they're pretty these are some heat maps of cities this is DC right here but you you guys probably can't see it this is Manhattan can't you tell anyways these are useless I'll just keep going okay all right this right here is what drivers see this is our supply positioning so in our company when math goes operational that becomes how am i doing on time by the way I have no timing here eight minutes left all right hey minutes left all right this is gonna suck all right all right so supply positioning right we have a heat map of demand but I can basically we're predicting demand 20 minutes ahead of time the problem is is that if I gave the heat map to drivers right they'll all go to the same spot and then that'll be bad for a lot of people who aren't in that hot spot so what we do is we say here's the heat map of demand or prediction for 20 minutes ahead of time but where is the supply right now that's anti heat that sucks the heat out of the map what's leftover is residual heat underserve demand and we do that on a neighborhood by neighborhood basis will ultimately go continuous on it the math is very tricky and complex and computationally intensive but that gives you a sense of some of the things we do that's in-car you don't see it because once you get in the car he's on trip and he doesn't see that map anymore dynamic pricing I talked a little bit about that already we have one of our nuclear physicists guys is a big San Francisco Giants fan clearly we have to look at events in the city because that affects the man in a big way when the Giants play of course demand is huge when the Giants win it's much huger than when they lose if you want to go out in style you know they want to go the bars they're just feeling good actually what's interesting is in Boston when they lose when the Red Sox lose we actually have bigger demand no joke here's what's really interesting it's not enough to make money yet I just gave away the punchline but basically that huge uptick in demand one that when the giant San Francisco Giants win starts about three hours before the game begins uber Vegas is gonna take on a whole new meaning okay so I'm gonna really speed through here and I this sucks because there's so much cool regulatory stuff I could have talked about but giving riders high-fives look transportations and thought of as a boring space it's boring well until you push a button and the car magically appears but we basically have lots of people who love us and how do we get them to tell that story over and over again given an excuse to tell the uber story so we do a lot of creative things I think a lot of you guys have seen that but look Valentine's Day we distribute tens of thousands of roses to thousands of drivers every girl who got in a car after 4 p.m. was handed a rose by the driver that's a strong move fellas I call it I call this scaling romance okay on Presidents Day in DC we did what we call an uber Kade okay Escalade Town Car Escalade American flags all the way down one out of every 20 people that pushed the button and uber Kade rolls up the truck the driver the driver has an earpiece that makes them look like Secret Service and as you're driving through town kids are like waving they're like knocking on the window we did something in we did something in South by Southwest we got pedicabs cuz you don't do a town car in South white that's just douchey like don't do that well at a pedicab let's do this right so we did that that's cool 100 pedicabs you push a button pedicab takes you wherever you want to go but we took ten of those petty cabs and we outfitted them with these containers that could hold Texas barbecue so we did on demand Texas barbecue you push the button and a cow would come to you on the map we did ice cream in July and every time we roll out a city we do what's called rider zero the first person to get in an uber when we soft-launched it used to be an organic thing that just happened and then the my city team started getting excited about it this is Edward Norton taking the first we were in Los Angeles to go surfing so we give riders high-fives but we give drivers hugs and that's because look the riders you know they date night goes well they get to their business meeting on time or they're not stranded a certain part of town but for a driver who's scrapping who maybe has a few hours in the morning and one or two hours in the evening or in the afternoon booked filling out that time with a consistent revenue stream helps him make ends meet and so you go from just barely making ends meet to really making a living and then investing in your business we have drivers who from one car to 15 each of those cars grossing more than a hundred grand a year so these guys are living their American dream this is riad he actually was hustling one of our engineers early on our engineers were getting unlimited uber he's like I got it we're cool but why don't you come join new burr he did he's the highest performing driver on the system he makes twenty or thirty percent more per hour I was productive driver on the system than all the other drivers he also is the highest-rated driver we still haven't figured out how he does what he does he now has five cars on the system he recently had his firstborn a son named his son after our engineer that's not funny like that's for real all right this is Hani he's a comedian been in the city for about 25 years he or he thinks of himself as a comedian every time I get in the car he tells me used to be a Chippendales dancer this is Steve Aziz and guys just somebody signal when I'm running out of time I have no idea I'll go over and spend an hour up here if you let me two minutes okay all right Steve Aziz has 15 or sorry 20 cars on the system he started with one he's got five kids told me out of six going and a six on the way that's funny I said Steve six kids you're crazy what are you doing dude that's nuts you got a business to run he's like I got I got to keep the uber that we were fleet growing his son there doesn't look too happy to be part of the uber fleet well I could talk about regulation I'd spend a couple minutes the bottom line is and I can't go through a bunch of slides because I really don't have the time well I don't know let's just go until somebody stops me this is a New York City medallion that's the license to basically own and operate a single taxi in New York the number of taxis or medallions in New York it's the blue bar there the dark blue it's basically been flat since 1946 the same number of taxis that were in the city in 1946 is the same number of taxis that are out there today that value of that medina is worth about a million dollars a pop there are 13,000 Medina's in the city of New York so you have 13 billion dollars directed at keeping uber from being successful DC we had a really interesting situation we went there by the way we were as far as we could tell we were totally legal White Glove legal nicest laws in the country in terms of sedans in DC but DC taxi commissioner goes out there and says ubers not legal because they charge by time and distance and let's just say that was real why is charging by distance evil I don't understand I don't get it but he said look you're charging my time and distance you're not allowed well we looked at the law well us as sedan a for hire vehicle designed to carry fewer than six passengers which charge for a service on the basis of time and mileage like what are you talking about is going in public forms Washington Post etc we go the Attorney General in the District of Columbia and that's what he tells us so when you read about the crazy stuff we're doing in the cities and I've got to close this down because I'm - that somebody's going to have the hook and they're gonna take me off here but when you read about the crazy stuff that we're doing in the cities know that it is corrupt out there know that we are highly highly disruptive in what you read in the papers isn't always true and the bottom line is that in order to be in this business in order to be this disruptive to what's going on you have to have you have to be willing to to fight and you have to not be you can't be shy so that gives you a little bit about it basically they try to put a floor on our prices I'll leave it at this one this last one here they put a floor on our prices try to pass what they call the uber amendment make our prices five times out of a taxi they rolled the amendment out July 10th there's a Monday at re a July 9th the vote on the bill was the tenth sorry they put the bill out on the night that was a Monday at 4:00 p.m. to vote on at 11:00 a.m. the next day 18 hours most of which are going to be sleeping I wrote an email to our consumers letting know that they're about to do this and by the way the rationale was to ensure that basically we don't compete if a CEO of a company told said something like this they'd be in jail but if you corrupt your politicians and then push those laws down that's totally legal anyways we did something called life liberty and the pursuit of Burness uber DC love is a hashtag 18 hours later we had 50,000 original emails these weren't robo emails that went to City Council people telling them not to vote for it 37,000 tweets 104 million social media impressions and we won and as you might imagine there wasn't a lot of sleep during that time but it was so short it maybe didn't matter so anyways guys I think the bottom line I've got so much stuff Vegas by the way gambling and prostitution or legal legal in Vegas but Hoover is not I got so much stuff I probably have to end this I'll just end with just a couple more slides here guys and I'm sorry about this look technology is wiring up the core services in city life right Airbnb us a bunch of other companies they're changing not just tech not just your twitter app they're changing how you live but that change used to happen over decades it's now happening over months quality of life is not red it's not blue it's just people right cities that resist are gonna feel backwards and there sees were not in they feel backwards right a lot of our customers who are used to this go to other cities it doesn't work so I asked the mayor's what are you protecting who are you protecting knowing realize they just don't even realize that they're protecting they think the taxi industry they think drivers know you're actually screwing over drivers so cities need transportation alternatives but they need modern accountable convenient stylish and efficient ones we're out there in a city near you guys and look I appreciate being here is a lot of fun and thank you

Channel: Y Combinator

Views: 108,976

Rating: 4.6308851 out of 5

Keywords: Y Combinator, Travis Kalanick, Startup School, Uber, 2012, YC

Id: rQ6GoY2_Ujw

Length: 28min 49sec (1729 seconds)

Published: Fri Oct 25 2013